HomeNewsCrypto Clash: Coinbase and SEC Tangle Over Digital Asset Status

Crypto Clash: Coinbase and SEC Tangle Over Digital Asset Status

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  • Coinbase’s Chief Legal Officer charges SEC Chair Gensler with deceiving investors about the legality of cryptocurrencies.
  • Gensler reiterates that because most cryptocurrencies lack the required disclosures and are under greater SEC scrutiny, they are securities.

Coinbase’s Chief Legal Officer (CLO), Paul Grewal, has publicly accused SEC Chair Gary Gensler of misleading the market about the legal status of cryptocurrencies. The conflict arose from Gensler’s recent classification of numerous digital assets as securities based on current legislation in an interview with Andrew Sorkin on CNBC.

Coinbase Strikes Back: CLO Challenges SEC’s Stance

On May 7, Grewal fiercely disputed Gensler’s position on social media, pointing out that SEC lawyers had already acknowledged in court that cryptocurrencies did not meet the conventional definition of securities.

He insisted that the SEC chair clarify his remarks in public, stressing that “tokens are not securities,” which runs counter to the agency’s own internal legal declarations.

In the same CNBC interview, Gensler reaffirmed his long-held belief that the majority of cryptocurrencies need to be handled like securities tokens and pointed out how few disclosures are required for these kinds of assets.

In support of his regulatory position, he cited the U.S. Supreme Court’s interpretation of the “law of the land.” Gensler has previously encountered opposition from powerful individuals in the financial and legislative domains.

As formerly reported by ETHNews, Senators Reed and Butler made a more general plea for regulatory clarification and less stringent enforcement when they urged him to stop endorsing the establishment of cryptocurrency ETFs.

Persistent Legal Obstacles: The Battle for Unambiguous Laws 

Since assuming leadership of the SEC, Gensler has concentrated on incorporating the cryptocurrency market into the commission’s regulatory framework, using the Howey test as a standard for figuring out whether digital assets qualify as securities.

To lessen the current sector uncertainty, several have called for legislative clarity directly from Congress, challenging this enforcement-centric strategy.

A number of prominent cryptocurrency companies, such as Ripple, Coinbase, and Binance, are now involved in legal battles with the SEC.

Along with these actions, the commission has sent Wells Notices to Uniswap, Consensys, and the digital trading platform Robinhood in the last month, indicating a sustained trend of regulatory attention to the cryptocurrency market.

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Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628